The growth of e-commerce is skyrocketing. According to market research firm, eMarketer, e-commerce sales are estimated to reach $3.5 trillion within five years and nowhere is that growth expected to leap the fastest than in emerging markets. According to consulting firm, McKinsey & Co’s report, Going for Gold in Emerging Markets, ‘By 2025, annual consumption in emerging markets will reach $30 trillion—the biggest growth opportunity in the history of capitalism.’ Indeed, an expanding middle class and the fast adoption of mobile devices have such regions as Africa, Middle East and Latin America primed for a boom in consumer spending including e-commerce.
Infrastructure still remains an issue for many emerging countries. Besides adequate roads and warehousing, broadband and electricity are also issues in certain emerging countries and added to all of this is the delivery address. Often overlooked in publications, the correct address is vital for successful delivery, however, according to What3words CEO, 75% of world has inadequate, poor or no addressing systems.
Of course, one can imagine that inadequate, poor or no address system can result in higher costs for retailers in the form of returns, inefficient business practices and poor customer experience. In addition, even in more developed countries such as the US, delivery companies such as UPS and FedEx will apply an additional surcharge for inadequate addresses which in turn further adds to retailers’ costs.
A couple of start-up companies, What3words and Fetchr, are looking to change the address issue in unique ways.
What3words is a unique combination of just 3 words that uses algorithms to identify a 3mx3m square, anywhere on the planet. According to the company, it works by dividing up the world’s surface into grids measuring 3x3m and assigning a three word marker to each one. The idea is that it’s more specific than postcodes, which were invented when posting letters was the main form of communication, and simpler than GPS co-ordinates, which are too complex for the average person to remember. For example, the mailing address for Logistics Trends & Insight is 8920 Eves Road, Roswell GA 30076, USA however, using What3words’ method the address is scanty.turf.hazed.
The service has been utilized by the UN which has used it to specify locations that have been hit by natural disasters. In addition, Esri uses it for its ArcGIS mapping platform, allowing its three word location labels to be used as a locator within Esri’s platform and software. Other paying customers include Navmii and the Norwegian National Mapping site, Norgeskart.
Based in Dubai, Fetchr has developed an app to utilize customers’ GPS coordinates as a delivery location. It allows users to take an image of their package for drivers to identify it, schedule pick-up and delivery, track the package, make payment and collect the items. The app offers B2C and C2C deliveries.
In addition, the company recently introduced Sellr which allows customers to sell on social media. According to Fetchr, “The way people sell on social media is a pain. People use WhatsApp, exchange numbers, go back and forth, and then work out the payment and the collection, and it can take a lot of time and effort.”
Fetchr is focusing efforts on emerging markets such as Asia, Southeast Asia and Africa where there are no addresses but rapid growth of e-commerce. “But you cannot solve the boom in e-commerce unless you solve shipping. E-commerce and shipping are one and the same. You cannot boom in e-commerce unless you master last-mile logistics” noted Fetchr CEO.
The spread of e-commerce has put the spotlight on the final mile delivery point. While there has been a particular emphasis on faster delivery in certain parts of the world, the struggle to locate the consumer is real in other parts of the world whether it’s for a package or for humanitarian efforts. The address which most of us take for granted is key to growth for others.